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presentation by Dr Esther Muiruri (Agribusiness General)
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PARTNERING WITH FARMERS THROUGH MICRO FINANCING
AGRICULTURE
ESTHER MUIRURI - EQUITY BANK
FARA CONFERENCE
ACCRA - GHANA
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EQUITY BANK
Our purpose We exist to transform the lives and livelihoods of our people socially and
economically by availing to them modern, inclusive financial services .
Our VisionTo be the champion of the social-economic prosperity of the people of Africa
Our mission
We offer inclusive,customer focused financial services that socially and economically empower our clients and other stakeholders
EQUITY BANK’s CASE FOR AGRICULTURE
Equity Bank strives to support agriculture through inclusive financial intermediation to transform agriculture from subsistence to commercially sustainable enterprises that have capacity to create employment, wealth, foreign exchange and enhance food security.
The Bank approached agriculture through partnerships with like minded players within the agricultural value chains
With special focus to the smallholder farmers the bank seeks to understand the needs of the farmers and develop products and services that meet those needs.
The Bank further develops policies and processes that can address the specific requirements for the smallholder farmers
Over the years Equity Bank has gained substantial experience largely from learning from the dynamics of dealing with smallholder farmers
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Why partnership with farmers ?
Constitutes a Large “underserved” market –the Base Of the Pyramid (BOP)
To promote economic empowerment by redistribution of
wealth through access to financial resources
Enabling micro enterprises (farmers, processors, transporters etc) to contribute to the economy and be part of the financial system
A Social responsibility to avail financial services to the lower segment majority of our rural community
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Benefits of partnerships
Allow partners to specialize in their areas of strength
Reduce the operational costs of smallholder producers
Spread risks among partners Achieve economies of scale Allow growth and expansion Ensure cash flow for the producers and
processors/buyers Generate opportunities for other BDS players
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Challenges and mitigation
Largely dependant on rainfall
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Challenges and mitigation
Lack of collateral to
access credit:
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Challenges and mitigation cont…..
Smallholder farmers are spread over large geographical areas
Develop cost effective mechanism through technology to reach out to the farmers such as mobile banking , agency banking
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Our experience in partnering with smallholder
Have established many strategic partnerships to support farmers through financial intermediation such as :-
Tea Farmers through KTDA Dairy sector with procesors like NKCC and
Brookside Dairies Livestock through KMC and NGOs Partnerships with horticultural exporting
companies Partnerships with Seed, Agrochemical and
fertilizer companies Partnerships with many local Parastatals and
other Development Agencies like WFP, FAO, WB, GIZ, IFAD, AGRA
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EXAMPLE –KILIMO BIASHARA PARTNERSHIP
Is product developed through Partnership between Equity Bank, AGRA and IFAD through Ministry of Agriculture . Also supported by World Bank through GOK funding from EU Under risk sharing facility.
Objective: To increase food security and household income
for farmers To support commercialization of agricultural
activities among Kenyan farmers Has reached over 60,000 farmers and agro
dealers with over ksh3.5 Billion (appx. over $41m) in loans.
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Kilimo biashara partnerships
Seed CompaniesAgro
traders,millers,WFP EAML
Using grain
handlers to promote
warehouse receipt
Farmers financed
to produce
Stockist/ Dealers outlets
Equity bank,MOA and other Developm
ent Partners.
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Harvesting fresh produce for export
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Supportive infrastructure
0ver 150 licensed country-wide branch network supported by over 550 Visa branded ATM’s, 4500 Points of Sale (POS), and over 5,000 agents network
EAZZY 24/7 service – allows customers to access banking services on their mobile phone.
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Capacity building on farmers
Financial Literacy is a service offered by Equity Group Foundation to support farmers to develop better financial management skills
Relationships managed by qualified extension staff in Equity Bank branches across the country
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Our products
Farmer friendly remittance account that encourage farmers to save with no ledger fees –accessible through EAZZY 24/7 and Agency network
Loans at affordable interest rate administered using group and individual lending methodologies
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Support required Awareness creation of existing opportunities Entrepreneurial Capacity building through
collaboration with partners Access to credit to farmers and value chain players Access to markets and competitive prices- to
support sustainable commercialization Use of technology to drive the business
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(insert the SMS banking poster)